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Home»Blockchain»Vitalik says rollups may lose billions if security isn’t proven before decentralizing
Blockchain

Vitalik says rollups may lose billions if security isn’t proven before decentralizing

NBTCBy NBTC06/05/2025No Comments4 Mins Read
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Ethereum co-founder Vitalik Buterin has issued a stark warning to developers of rollup-based L2 systems solutions, emphasizing that the rush to decentralize without robust security measures could result in catastrophic financial losses

In an X post, the Ethereum co-founder pointed out that achieving stage 2 in an L2 network is critical for security; however, he claimed that it’s just as vital to strengthen the underlying proof system. He added that rushing to stage 2 without significantly improving proof reliability could actually increase the chances of failure.

One of Buterin’s points of concern is that many rollups still rely on centralized control mechanisms, “training wheels,” as he described. While useful to help get the ball rolling, they can also become single points of failure that hinder progress unless replaced with robust, decentralized alternatives.

He stressed that rollups are vulnerable to attacks and operational failures without proper security measures such as fraud or validity proofs, threatening user trust and damaging the wider Ethereum ecosystem.

Daniel Wang suggests adding a “BattleTested” label to Layer 2 roll-ups

Buterin’s post came in response to Loopring founder and CEO Daniel Wang’s suggestion to have a separate label for Stage 2- BattleTested- for improved security.

The Loopring CEO asserted that a roll-up could be classified as BattleTested if its code has been on Ethereum’s mainnet for more than six months and maintained a TVL of $100 million, including at least $50 million in Ethereum and a major stablecoin.

He also proposed that the BattleTested status should not be permanent— any changes made to the rollup should require it to go through the qualification process all over again to earn back the label.

Then again, it would not matter if a roll-up was in stage 2 or not; a roll-up could still qualify for the BattleTested label.

Responding to Wang’s proposal, Buterin remarked: “A good reminder that stage 2 is not the only thing that matters for security: the quality of the underlying proof system matters too.”

Dominick John, an analyst at Kronos Research, also argued that a system becomes truly decentralized when it can prove reliable under economic stress and not just through theoretical proof system designs.

He added that before shifting from stage 1 to stage 2, rollup teams must also prepare for the risks they’ll face that threaten network security.

Buterin: Rollups should hit stage 2 only with strong proof systems

In another X post, Buterin elaborated on the best time to move to stage 2 in a mathematical model.

In his model, he made the following assumptions: each security council member has a 10% failure rate, liveness failure and safety failure are equally probable, stage 0 security council is 4-of-7, and stage 1 is 6-of-8.

Considering these assumptions, he argued that as the proof system quality rises, the optimal stage shifts from Stage 0 to Stage 1 and eventually to Stage 2. That means stages 0 or 1 are more reliable when failure probabilities increase than stage 2. Therefore, advancing to stage 2 is only appropriate when your proof system is dependable.

With these hypotheses, he claimed that as the proof system strengthens, the peak level will move from Stage 0 to Stage 1 and then Stage 2. Therefore, stages 0 or 1 are more reliable as the probability of failure increases compared to stage 2. So, you should only move on to phase 2 if you have a reliable system of proofs.

He further suggested that using multi-sig-proof systems would lower the likelihood of system breakdown.

In addition, Mike Tiutin, chief technology officer of decentralized compliance protocol PureFi, offered his perspective on the topic, with the belief that you could be compromising your system security by decentralizing prematurely.

In the same vein, Kronos analyst John contended that decentralization should not be considered a race but a shared responsibility of the crypto ecosystem. In stage 1, councils can step in to assist if the system breaks, but in stage 2, a stepback would involve millions of dollars, he said.

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NBTC is the editorial account for NBTC News, covering Bitcoin, Ethereum, DeFi, blockchain infrastructure, exchanges, mining, regulation and digital asset markets. The editorial team focuses on clear sourcing, timely updates and practical context for crypto readers.

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